Unique logistics system makes for cost-effective shipping

A newly developed computer system for managing shipping could help cut logistics costs at Hydro’s Norwegian aluminium smelters by several million kroner per year.

January 10, 2013

"No one else in the world has a similar programming system for overall planning of shipping traffic," says Sindre Bolseth, logistics manager in Primary Metal.

The unique system was developed by Hydro in cooperation with the information technology company Seamless, with assistance from Innovation Norway, a government agency that supports innovation and development of Norwegian enterprises and industry.

Complex picture

At any particular moment, Hydro has a number of ships in transport, moving raw materials to the company's plants and finished products to the global market.

Planning all this traffic presents quite a complex picture. Hydro accounts for about 1,200 port calls a year in Norway alone, with a number of ships in traffic to and from Brazil, Continental Europe and the U.S.

"If we don't get it right, we can end of without enough deliveries of raw materials while the wharf is occupied by another ship. Then we have to pay costly day rates for the ship that's waiting to be offloaded. In addition, we might have to call in extra manpower to offload the ship when it finally gets a slip at the wharf," Bolseth explains.

In 2009, Hydro figured that these extra costs totaled about NOK 16 million. It is these costs that the new system can make a thing of the past.

Planning tools

"The program we have developed is a planning tool that gives an overview of all of the ports and all ships that are in traffic, and has a number of built-in functions for cost control at local ports," says Olav Madland, a manager at Seamless.

He points out that it is unique that a company as large as Hydro can use just one system across borders and business areas.

Seamless has been developing the program over several years. On Tuesday, Hydro employees began training on the system.

Potential environmental payoff

Rita Schage of Innovation Norway says that the development of such a system has received support for two reasons.

"We think this is an exciting business idea that can have international potential," Schage says. "In addition, there are environmental effects of optimizing logistics at ports around the world."

More sea transport

Hydro already has been working on cost-effective transport solutions with environment benefits. One project replaces close to 5,000 truck cargos on Norwegian roads with ship traffic. This produces lower CO2 emissions and eases traffic on roads.

"The new logistics system is an important contribution to succeeding with this strategy in a cost-effective way," says Elisabeth Holmsen, head of logistics and distribution in Primary Metal in Hydro.

Updated: October 11, 2016